Grants Office Insights: The Current State of Federal Funding

The federal grant funding picture was thrown into disarray in January by the release of several Executive Orders targeting federal funding that would support “DEI” (Diversity, Equity, and Inclusion), “Clean Energy,” “Woke Ideology,” and more.

In response to these Executive Orders, the Office of Management and Budget (OMB) released Memorandum M-25-13. This sweeping directive temporarily halted financial assistance programs for a review process aligned with the new Presidential Administration’s policy priorities.

While M-25-13 was rescinded, the OMB moved forward and paused all pending or currently active federal Notice of Funding Opportunities (NOFOs), providing Federal agencies with a spreadsheet to designate which Federal financial assistance programs, projects, and activities may conflict with the recent executive orders. They were further tasked with 1) assigning a “senior political appointee” to ensure all funding conforms with new administrative priorities and (2) reviewing pending awards of Federal financial assistance to ensure compliance. In total, this review encompasses more than $3 trillion across 2,600 funding programs.

No further clarification on the OMB’s review – including timeline, expectations, or participating individuals – was made public. However, a decision tree was distributed to program officers at the National Science Foundation to comply with the Trump Administration’s list of forbidden words, which was leaked in early February.

Several lawsuits have already been filed by states, nonprofits, and active grant award recipients challenging the legality of the President’s executive orders and memoranda. The long-term outlook depends on future judicial rulings and potential Congressional intervention.

With this flood of executive orders, memoranda, lawsuits, and press releases, grant seekers across all sectors face many questions and uncertainty around federal funding opportunities. The most important message is, “Don’t panic.” Grants are not going anywhere. Grant programs that allow federal agencies significant discretion in funding priority decisions are the most vulnerable. However, statutory grant programs written into law with clear funding priority parameters are more insulated from sudden cuts or modifications. Despite all the current uncertainty, grant-seekers are not powerless:

·       Consider exploring alternate funding sources like state, local, and foundation grants, developing industry partnerships, and working with businesses that may support your project.

·       Stay informed by monitoring the news for updates from the OMB and federal funding agencies that grant-seekers historically have worked with.

·       Be flexible and get creative. If a grant program’s priorities shift away from previous years’, grant-seekers can adjust their proposals to better align with those new priorities.

·       Make their voices heard by contacting congressional representatives to express concerns about funding cuts.

Remember, while these past few weeks have created significant disruption, it does not mean the end of federal grant programs. Take a step back, breathe, and carry on.